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C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 000077
SIPDIS
SIPDIS
DEPT FOR EAP/CM, INR/B, INR/EAP, AND DRL
STATE PASS USTR FOR STRATFORD, WINTER, MCCARTIN, ALTBACH, READE
TREAS FOR OASIA - DOHNER/CUSHMAN
USDOC FOR ITA/MAC - KASOFF, MELCHER, MCQUEEN
NSC FOR WILDER AND TONG
E.O. 12958: DECL: 2/5/2032
TAGS: PGOVPHUMPINRKJUSCH
SUBJECT: CG VISITS YANGZHOU; DISCUSSES NEW SOCIALIST COUNTRYSIDE AND
CHINESE DEMOCRACY
SHANGHAI 00000077 001.2 OF 004
CLASSIFIED BY: Kenneth Jarrett, Consul General, U.S. Consulate,
Shanghai, Department of State.
REASON: 1.4 (b), (d)
¶1. (C) Summary. The Consul General visited Yangzhou City in the
northern section of Jiangsu Province from January 29-30. During
a visit to a model "new socialist countryside" village, local
officials showcased the progress being made in the
municipality's rural areas and successes in moving labor from
agriculture to industry without flooding urban centers with
migrant workers. Separately, the Mayor and a vice mayor
discussed Yangzhou's democratic development. According to these
officials, Chinese democracy meant combining public
participation--through public hearings, elections, and the
like--with public supervision of officials. Yangzhou had
implemented several concrete mechanisms for expanding these key
components of democracy. However, according to these officials,
the Chinese Communist Party (CCP) alone was capable of
representing the entire Chinese population and was the only
party needed to govern China. End summary.
--------------------------------------------- ---------
Jinhuai Village: Face of the New Socialist Countryside
--------------------------------------------- ---------
¶2. (SBU) On January 29, Yangzhou FAO officials accompanied the
CG and Poloff to nearby Jinhuai Village to showcase how Yangzhou
was successfully implementing the call put forward at the
October 2005 Fifth Plenum to build a new socialist countryside.
Only a half hour drive from the city center, Jinhuai, with a
population of 3,120, is a model of Yangzhou's vision for the new
socialist countryside. The village center consisted of: a
massive auditorium; a new playground complete with several
net-enclosed trampolines; a large modern supermarket (an
official with the municipal New Socialist Countryside Department
said the central government required new socialist countryside
villages to have a place for villagers to spend money); a
medical center that provided basic medical services and
distributed free contraceptives; a small library; a gymnasium;
an "old folks recreation center;" and row after row of newly
minted three-level 400 square meter homes. Officials said that
Jinhuai was ranked in the top 33 most prosperous villages of all
of Yangzhou's 1,248 villages. Yangzhou's goal was to have 50
percent of all its villages look like Jinhuai within five years
and 100 percent within 10 years.
¶3. (SBU) According to village officials, the village was a
great example of the "pull-yourself-up-by-your-bootstraps"
mentality required to effectively implement the new socialist
countryside. Funding for many of the major projects had come
frQ local residents and tax revenues generated from local
industries. There were 17 factories set up in the village
vicinity, all owned and managed by village residents. These
factories employed about 70 percent of the village work force,
paying average salaries of 12,000 RMB (approximately USD 1545)
per year. Each family had bought its own home for around
140,000 RMB in 2000--one official claimed the houses were now
worth over 600,000 RMB--without government assistance. One of
the successful enterprise owners had donated the auditorium.
The village government had provided the land and facilities for
the supermarket--a privately-owned local chain--through tax
revenues generated from the local industries.
¶4. (SBU) Perhaps more important than the creature comforts,
Jinhuai has successfully implemented the new socialist
countryside program's main goal of moving people out of farming
and into local industry. This has allowed the village to reach
relative economies of scale in agriculture while absorbing
excess labor without further burdening overcrowded urban
centers. According to village officials, only 10 percent of the
population now worked the land--compared with 20 percent in some
of Yangzhou's other villages. This 10 percent of the population
cultivated approximately 3 million mu of rice, 1.2 million mu of
aquaculture, and did a brisk business in ducks. Seventy percent
of all of the Yangcheng Lake "hairy crabs"--a local freshwater
crab delicacythat is popular in Shanghai--actually started out
in the area surrounding Jinhuai. They were then "dipped" in
Yangcheng Lake so they could sell at the higher price commanded
by Yangcheng crabs. Farmers earned an average of 5,000-8,000
RMB. Very few residents actually left Jinhuai for work in the
cities, finding the employment situation in the village
SHANGHAI 00000077 002.2 OF 004
sufficient for their needs.
¶5. (C) Despite the facade of independence, it appeared that
significant municipal funding and planning had gone into the
construction of this model village. The architecture and feel
of the village--with its uniform pink housing and drab cement
covered store fronts--had a distinct "planned economy" flavor.
Most of the new housing had been constructed at the same time.
Trees surrounding the fish pond in the village center were only
a few years old, and were the only sign of vegetation in the
village. While official press reports have said that localities
have received monies for building the new socialist countryside,
there was no discussion of what funds Jihuai had received or for
what purposes they had been used.
¶6. (SBU) Village officials did note that local residents
received a subsidy of 145 RMB per month per person in rent for
land used in the public works and private enterprise projects.
They also said that the central government's "Four Agriculture
Subsidies" (i.e. the cancellation of the agriculture tax and
subsidies for education, purchasing better crop strains, and
agricultural modernization) accounted for approximately 1,000
RMB of farmers' annual incomes.
-------------------------------------
Meeting the Mayor: Food, Fun, and FDI
-------------------------------------
¶7. (U) After the countryside visit, the CG met with Yangzhou
Mayor Wang Yanwen and Vice Mayor Wang Yuxin. Mayor Wang said
that economic development had really picked up with the
renovation and expansion of the river port, the building of
several new bridges over the Yangtze River, new rail
connections, and a modern highway over the past decade or so.
Much of the investment coming into the city came from Guangdong,
southern Jiangsu, Zhejiang, and Shanghai. Investors included
foreign firms as well, such as Colgate, and Asimco. Yangzhou
was determined to encourage more investment--particularly
foreign investment--into the city and had a target of USD 1
billion of FDI for 2007. Even the Foreign Affairs Office had a
specific target they must meet for bringing in investment--for
2007, it stood at 20 million RMB.
¶8. (U) Mayor Wang noted that the living environment was
particularly suitable for foreign investors, praising "Huaiyang"
cuisine--the style of food traditionally prepared in
Yangzhou--as some of the best in China. She also noted that the
city government was deeply concerned with protecting and
maintaining its tourist areas. Indeed, any new construction in
Yangzhou required the approval of the Cultural Bureau to ensure
that no sites of historical value--whether above or below
ground--would be damaged. Wang did say, however, that Yangzhou
lacked any quality international schools that would be crucial
to encouraging foreign companies to have a significant presence
in the city.
--------------------------------
Chinese Democracy Yangzhou Style
--------------------------------
¶9. (SBU) During the dinner, Vice Mayor Wang noted that in line
with building a Harmonious Society, Yangzhou was striving to
deepen democracy throughout the municipality. He quoted from a
recent article by Yu Keping titled "Democracy is a Good Thing,"
noting that democracy was a process. Wang said that
participation and public oversight were the keystones of Chinese
democracy and that Yangzhou had implemented several concrete
reforms along those lines in recent years.
10 (C) For instance, rural areas now held direct elections for
village head. Yangzhou had also established a "1-2-3-4-5
hotline" allowing people to call in with questions, complaints,
and suggestions. Indeed, Poloff noticed several billboards
around the city advertising the hotline. The city had also
begun implementing public hearings on draft legislation that was
of particular importance to the lives of local residents.
Yangzhou had also begun publishing all government actions on
line and had strengthened the People's Congress oversight
function with its 2006 "Supervision Law," although he did not
provide details about the law itself. Wang also pointed out
that the party's Discipline Inspection Commissions (DIC) and
their government equivalents also played an important role in
allowing the public to supervise the government. People were
SHANGHAI 00000077 003.2 OF 004
allowed to write to these organizations with tips on corrupt
officials. In fact, according to Wang, the Chen Liangyu case
was sparked by just such a tip from a citizen in Shanghai.
¶11. (SBU) Mayor Wang said that there could be no democracy
without economic development and bettering the lives of the
people. Moreover, it was not clear that there was a uniform
style of democratic governance that could be applied to China.
Given that China had so many people over such a large land mass,
problems in some localities might not be problems in others.
¶12. (SBU) Vice Mayor Wang noted that there was no need to
discuss multiparty democracy since there was no political party
in China better able to represent all of the Chinese people than
the CCP. Mayor Wang added that one reason the CCP was such an
effective governing party and able to bring about such rapid
economic development to China was because it did not have to
waste time and energy debating decisions with other parties.
When the CG countered that the discussion and negotiation
process between political parties enhanced the people's ability
to exercise oversight, Mayor Wang simply said that the kind of
political system in place did not matter if the country was
developing well.
-----------------------------------
Yizheng: An Automotive Super Center
-----------------------------------
¶13. (U) The following day, the CG visited two factories in the
more prosperous nearby township of Yizheng. At the Yizheng
Shuanhuan Piston Ring Factory (YSPRF)--a joint venture with the
American company Asimco--helpful signs in English and Chinese
dotted the landscaping, encouraging employees to "Act as
promised and work harder tomorrow," reminding them that "If you
don't work hard today, you may have to look hard for a job
tomorrow." A former state-owned enterprise, YSPRF currently
employed over 2,000 local Yizheng residents (although all of the
managers were from outside of Yangzhou), paying an average
annual salary of 20,000 RMB, and supplied over 50 million RMB in
taxes to the Yangzhou government coffers in 2005 alone. The
second factory, Shanghai Huizhong Automotive, a subsidiary of
Shanghai Automotive Industry Corporation, produced passenger
vans to order, employed over 8,000 local workers, and paid an
average salary of 18,000 RMB per year.
¶14. (U) Foreign Affairs Office Deputy Director Zhang Liansheng
explained that Yangzhou had emerged as an automotive center due
to geography and good old-fashioned communist planning. The
city is situated on the Yangtze River, not too far from Shanghai
and even closer to Nanjing, almost in the middle of China's
coastal edge and is home to a relatively cheap and skilled labor
pool. As a river port city, Yangzhou had initially developed as
a steel-manufacturing center, receiving ore from mines upstream
in Anhui Province and transporting finished goods downstream to
Shanghai. During the planned economy era, central planners
determined that it made sense to develop Yangzhou as a farm
implement and automotive center, a niche that has persisted to
this day.
------------------------
Bio Comment: Wang Yanwen
------------------------
¶15. (C) Mayor Wang was animated and engaging in her mannerisms
and had a good command of her briefing materials, needing
neither notes nor cues from her subordinates. She appeared
knowledgeable about the history, culture, and economy of the
city. Born in April 1960, Wang is relatively young and we
expect that she will move up and out of Yangzhou, although it is
not clear to what level. Wang is married and has twin 18-year
old boys. Her husband still resides in Nanjing. Wang gave no
indication of speaking or understanding English. She was
recently back from a trip to the States, focused on urban
planning, together with other Jiangsu mayors and party leaders.
Asked about the selection of the theme, Wang explained that
Jiangsu Party Secretary Li Yuanchao had made the decision. Li
believed that unless municipal leaders knew more about urban
planning, provincial cities would continue to develop in a
chaotic way.
¶16. (C) Wang's career path resembles that of another Jiangsu
noteworthy, Party Secretary Li Yuanchao. After a few party jobs
in the Nanjing Electronics Industry Bureau during the 1980s,
SHANGHAI 00000077 004.2 OF 004
Wang served as Deputy Party Secretary and then Party Secretary
of the Nanjing Municipal Communist Youth League (CYL) for the
better part of a decade between 1991-98. She served as Piaoshui
County Deputy Party Secretary and County Head and then as Party
Secretary from 1998-2001. Wang returned to Nanjing in 2001 as a
SIPDIS
member of the Municipal Party Standing Committee and head of the
Propaganda Department. Those positions would have put her in
close contact with Li Yuanchao who had just returned to Nanjing
as Municipal Party Secretary and Deputy Party Secretary of the
province in 2000.
JARRETT